FERTILITY CHOICE AND ECONOMIC-GROWTH - THEORY AND EVIDENCE

This paper examines a growth model with endogenous consumption, labor- leisure, and fertility. A fertility choice variable capturing both the quality and quantity of the family size enters the utility function p ositively, but it also generates time costs, Theoretical comparative d ynamic results are derived for changes in exogenous production and uti lity parameters. Employing post-World War II United States data. we es timated the model using a structural VAR with imposed long-run restric tions based on the theoretical predictions. The empirical results lend support to the endogeneity of fertility choice and present dynamic re sponses of each endogenous variable to employment, fertility, and outp ut shocks.